Royal Dutch Shell PLC, Europe’s largest oil producer, on Thursday reported its lowest annual income in more than 10 years, with profits dropping 87% to $1.94 billion as its oil and gas production unit took a beating from plummeting oil prices.
Amid the shrinking earnings, the company said it would take major steps to reduce costs to address unfavorable market conditions.
“Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that,” CEO Ben van Beurden said in a statement.
The Dutch oil producer said it will be reducing investment, selling assets and cutting approximately 10,000 jobs to address bleak market conditions.
Shell’s falling earnings are the latest in a series of losses reported by oil companies as the crude market continue to be oversupplied. As a result, global crude prices have dropped 75% since the middle of 2014.
ExxonMobil, the world’s largest oil company, this week reported is weakest quarterly profit in over a decade, while BP reported its worst loss in the company’s history, surpassing the losses it absorbed in 2010 during the costly oil spill in the Gulf of Mexico.
Shell stocks, however, rose 6.4% in early morning trading as the company maintained its annual dividend payment of $1.88 per share.